LA settles health insurance lawsuit for $6M

LOS ANGELES (AP) — The city attorney announced a $6 million settlement Thursday to resolve a lawsuit that alleged health insurer Anthem Blue Cross illegally dropped more than 6,000 policyholders from coverage.

The settlement is far less than the $1 billion in fines and restitution former Los Angeles City Attorney Rocky Delgadillo threatened when the lawsuit was filed in 2008.

At the time, Delgadillo said some of the dropped policies affected elderly patients and patients with health costs that topped $100,000. Anthem denied the allegations then, and is admitting no fault in the settlement now.

The settlement took into account Anthem's steps to enhance policyholder safeguards, including revised applications and implementation of an independent review process for dropped policies, the city attorney's office said.

The $6 million will be divided between the city and the county, earmarked to be used on consumer enforcement efforts.

None of the people who initially worked on the case for Delgadillo still works in the office and the current staff is satisfied with the settlement, said William Carter, chief deputy city attorney.

Policyholders won't get relief from the settlement, which doesn't call for restitution or reinstatement of insurance policies.

Anthem Blue Cross spokesman Darrel Ng said the settlement bars him from making additional comment, and he referred to the city attorney's statement.

Delgadillo filed a similar lawsuit seeking $1 billion in fines and restitution from Blue Shield of California in 2008. It was settled for $2 million in 2011.

Anthem Blue Cross is a subsidiary of Indianapolis-based WellPoint Inc.